Tax group: 9-9-9 raises taxes for 84 percent

Herman Cain’s plan to dramatically revamp the tax code has gotten dinged again, with a prominent independent group saying Tuesday that the GOP presidential candidate’s 9-9-9 plan would raise taxes on more than three-quarters of Americans.

The Urban-Brookings Tax Policy Center said that, despite Cain’s claims to the contrary, 9-9-9 would dramatically raise taxes on low-income filers and reduce the tax burden of the wealthy.

At a GOP presidential debate on Tuesday, Cain’s rivals for the Republican nomination cited the new analysis as they continued to slam the tax proposal.

Former Sen. Rick Santorum (Pa.), for instance, gave Cain credit for being bold, but also said the plan would hurt too many Americans.

“I give him credit for starting a debate, but it’s not good for families and it’s not good for low-income people,” Santorum said.

Rep. Michele Bachmann (Minn.) also reiterated another frequent criticism 9-9-9 has gotten from conservatives — that it opens up a new revenue stream for the federal government.

“One thing I know about Congress, being a member of Congress for five years, is that any time you give the Congress a brand-new tax, it doesn’t go away,” Bachmann said.

Cain, meanwhile, tried to parry the attacks, repeating his defense that critics of his plan had not really examined its proposals. The former Godfather’s Pizza CEO has also said that 9-9-9 would scrap many of the invisible taxes that go into the price of goods.

“It is revenue-neutral. It does not raise taxes on those that are making the least. All of those are simply not true,” Cain said Tuesday. “The reason that my plan — the reason that our plan is being attacked so much is because lobbyists, accountants, politicians, they don’t want to throw out the current tax code and put in something that’s simple and fair.”

Cain’s plan would install a 9 percent sales tax, a 9 percent corporate tax and a 9 percent federal individual income tax.

According to the Tax Policy Center, the plan could be expected to raise around $2.55 trillion of revenue in 2013 — roughly the same amount that would occur under current law if the Bush tax cuts were extended and the payroll tax cut expired.

But the tax center added that the plan would raise around $300 billion less than what would be raised if most of the tax cuts that were enacted over the last decade expired.

The center also said that, under Cain’s plan, lower-income taxpayers would see significant spikes in their tax bill: Someone making between $30,000 and $40,000, for instance, would see a $3,833 average tax increase.

But on the flip side, taxpayers making more than $1 million would, on average, receive a tax cut of more than $450,000.

In fact, taxpayers making more than $1 million a year would have the lowest average federal tax rate of any income level, at roughly 18 percent. For comparison’s sake, those making between $40,000 and $100,000 a year would pay slightly less than 24 percent, on average.

The Tax Policy Center did not assess Cain’s plan to have “empowerment zones” that would help reduce the tax bill for lower-income workers, saying it did not receive details on that proposal.

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